Vanke Drops 8.8 Percent as China Stocks Drop Most in 4 Years – and more of Today’s China Real Estate Links | June 25, 2013

Here is a list of the day’s latest China real estate news collected from around the web:

• Vanke Drops 8.8 Percent as China Stocks Drop Most in 4 Years

  China’s stocks fell the most in four years, as the CSI 300 Index entered a bear market after the central bank signaled it will maintain efforts to curb speculative lending and Goldman Sachs Group Inc. said a cash squeeze is hurting growth.

  China Minsheng Banking Corp. (600016) and Ping An Bank Co. plunged 10 percent, while a gauge of financial companies tumbled 7.6 percent for the biggest loss among industry groups after the People’s Bank of China said there’s a reasonable amount of liquidity in the financial system and urged banks to control risks from credit expansion. China Vanke Co. led declines for developers with an 8.8 percent slump. Jiangxi Copper Co. slid the most since 2010 as Goldman Sachs and China International Capital Corp. cut their 2013 China economic growth forecasts.

• Sinopec Accused of Snatching Affordable Housing as Staff Benefit

  An affordable housing project under construction in Beijing, intended to house low-income residents, is said to have been held back by some central government departments and State-owned enterprises (SOEs) as a source of “welfare housing” for their employees, reported China National Radio (CNR) on Saturday.

  The back-door housing scheme, which was spotted in Guanghua New City, a residential community along Beijing’s East Fourth Ring Road with 18 buildings and covering an area of 1.08 million square meters, has triggered a public outcry and demands for an investigation.

• Analysis: Another China central bank worry; companies push into lending

  Chinese companies are getting more creative in the business of money lending as they struggle to keep profits ticking over in a cooling economy, raising concerns they are adding to the mountain of debt risks building in the world’s No.2 economy.

  Big state companies in industries struggling with over-capacity but with easy access to credit are borrowing funds, not to invest in their business but to lend to smaller firms sometimes at several times the official interest rate, part of an informal lending market in China that authorities are taking aim at.

• China’s Real Estate Bonds Bomb During Cash Crunch

  China’s builders have been the world’s worst-performing real-estate bonds this quarter as Premier Li Keqiang allowed a record cash crunch to rebalance the economy away from property investment.

  Dollar-denominated notes sold by Chinese developers have lost 4.1 percent this quarter, the most since the three months ended Sept. 30, 2011 and the worst among peers in major economies in Bank of America Corp.’s Global Corporates Real Estate Index. That marks a reversal after the debt topped 2012 rankings with a 22 percent return. Australian builders lost 0.8 percent since March 31, while Japan’s shed 1.7 percent.

• Outlet Malls Draw Chinese Shoppers

  Well-heeled Chinese shoppers have been visiting Dior and Burberry stores in New York, Paris and London for years. Now, the luxury brands’ locations in Woodbury Commons and other suburban outlet malls are seeing some foot traffic as well.

  A May report by Boston Consulting Group said that while Chinese consumers are still shopping, given the shaky economic outlook, they’ve become “more sophisticated with bargain-hunting.” Combined with a population that is traveling overseas in greater numbers than ever before, retailers and mall operators say they’re seeing a shift to the lower-priced merchandise that most outlets specialize in.

• China hotel REIT offers guaranteed rental returns

  Listing candidate New Century Real Estate Investment Trust, the world’s first China-based hotel reit, is providing a guaranteed minimum rental of 216 million yuan (HK$273 million) for the first five years in a bid to drum up investor interest amid a slump in equity markets worldwide.

  The reit aims to sell 469.91 million units in a price range of between HK$3.50 and HK$4.20 per unit and expects to raise between HK$1.64 billion and HK$1.97 billion to finance the acquisition of hotels. The yield could range between 6.5 and 7.8 per cent this year, depending on the offer price.

This list is updated daily, so tune in again tomorrow for more up to date information.